TFTC: A Bitcoin Podcast - #331: The state of global energy markets with Anas Alhajji

Episode Date: May 9, 2022

Join Marty as he sits down with Anas Alhajji to discuss the state of global energy markets. Follow Anas on Twitter Learn more from Anas Shoutout to our sponsors: Unchained Capital Braiins HodlHodl

What is up freaks, it's your boy Marty Bent here to introduce this rip of TFTC sat back down with Anas El-Hajji, who I haven't sat down with in about two years. The last time we sat down was during the aftermath of the oil and gas prices, where the oil prices are going negative here in the US in March or April of 2020. So it's been a while. A lot has happened. a lot of what Anas predicted in that episode has come to fruition over the last two years and very recently in reaction to the Russian-Ukraine conflict war that's going on right

now, particularly around the pricing of oil contracts in yuan and rubles. So he was sending a signal back then a couple of years ago, and I think he just delivered us a lot of signal now. I think this is a very important episode. I usually don't do this, but I think you should share this with friends, family, to get this information out there. I think the situation that's unfolding in global energy markets is pretty dire.

The politicians and the corporate press are not doing any of us individuals any favors because they are not characterizing the causes of the problem and the severity of the problem. They're not communicating that at all. These people don't have any integrity. they don't have any competence

we cannot depend on them share this episode with friends and family Nas knows what he's talking about he's been right in the past on this show I think he's right about what's unfolding now and just how bad the situation is and what may come

from that later this year and beyond if we don't get our shit together this trip was brought to you by our good friends at Unchained Capital Unchained Capital is here to bring you a suite of products, financial services. They have their loan desk.

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where there aren't a lot of competent and integral or corporate press entities with any integrity we like to think that we have integrity here at TFTC and anything you can do to support us is massively appreciated

because we do want to get the word out to more people and so subscribing liking subscribing to YouTube supporting us via podcasting 2.0 apps really helps the show and helps get it out there to more people because that's what really what our goal is this year is to begin throwing flames or excuse me throwing gas on the flame that is tftc to to really blow it up and get it out to as many people as possible because we feel like

it's imperative that people get more quality information which we aim to provide enjoy you've had a dynamic where money's become freer than free when you talk about a fed just gone nuts all all the central banks going nuts so it's all acting like safe haven i believe that in a world where central bankers are tripping over themselves to devalue their currency bitcoin wins in the world of fiat currencies bitcoin is the victor i mean that's part of the bull case for bitcoin if you're not paying attention you probably should be they were saying the the the world of global energy markets is is completely insane i'm happy to be sitting down with anas al haji again it's been a while welcome back thank you thank you uh

it's been a while but throughout this period since the first show as you recall uh i mean things went crazy and one of the developments that were related to the first show was the russian leadership asking the europeans to pay a ruble for the russian gas supplies so that was one of the things that we as you recall we discussed about pricing oil and gas etc yeah it's all come full circle that was a very prescient episode if you go back and listen to the first time anas was on the show this is what we discussed it has come to fruition obviously we have war between russia and ukraine breakout early this year and this is coming on the back end of supply disruptions that have been growing uh throughout the the covid pandemic and now it

seems like shit is officially hitting the fan. We have energy crises popping up across the world. I mean, you mentioned natural gas in Russia. Obviously, that has become a big topic of discussion with the ongoing war. Europe's trying to not purchase oil and gas from Russia, but they're finding that they desperately need those fuel sources. And then on top of that, we have diesel shortages popping up and it seems like a lot of the energy policy stuff that that has been decided on the last decade is is coming to to bite us in the ass what is your perspective on the global uh and uh in addition to that since the first show we had the leak from the saudis uh basically sending a hint to the u.s leadership that they want to

get their revenues from oil sales to China in Chinese currency. And we discussed those issues at that time on the differentiation between pricing oil in dollar and getting revenues in non-dollars. So for those who are interested, they can go back to that recording and listen to those discussions. Right now, one of the main problems we are focusing on is whether we are to hit a recession or whether we are already in a recession and what the impact of that on the energy markets, including oil prices and natural gas prices. Right now, as you all know, oil prices are still above $100, especially for Brent. We have a major decline today, by the way. We have major issues in the energy markets since the morning. But natural gas prices are very high.

oil prices are very high the price of food is is high throughout the world and that's affecting economies and many people especially those who are focusing on macroeconomics think that if we are not already in a recession we are heading for a recession and what would that do to energy markets and this is now one of the biggest concerns next to the russian invasion of ukraine Yeah, I mean, there's a lot of people talking stagflation here in the U.S. specifically. Obviously, we had the negative GDP print for Q1. Q2 numbers will come out at end of July. And if that trend continues and we have another negative GDP print and we're officially in a recession, but the supply chain issues are causing prices to rise in energy and food specifically, like you just mentioned. And what happens if we get to the end of July, that data comes out and the Fed is forced to act via interest rate policy? Absolutely. And in fact, one of the main historical events that we've seen historically was, if you go back and look at the period between 2002 and 2008, in fact, since September 11th, What we've seen is a continuous increase in oil prices and prices hit $147 at that time.

But when prices increased from $30, $40, $50 all the way up to $147, we did not see the economies of Europe, the United States, Canada, India, China, South Korea being hurt. Instead, we've seen good economic growth with high oil prices. And no one really worried about high oil prices at that time and their impact on the economy. So what happened then that makes things different now? And what happened at that time is that was the only period in history where we've seen increase in oil prices or continuous increase in oil prices with continuous increases in incomes, that disposable income, continuous increase in government spending, military spending spending on security while the dollar was going down and interest rate was going down

now we have the opposite the dollar is very high being going up and is high and interest rate is going up and governments are trying to control inflation by reducing government spending at the same time we are seeing increases in taxes in some countries like india where they are increasing taxes on fuel where fuel prices are among the highest in the world if not the highest at the same time because of the boom in real estate especially in a place like texas and where you are right now uh the property taxes since they are a percentage of the of the estimated value are gone up so that constitutes an increase in taxes so everything we almost everything we have now is the opposite of what we had in the past and therefore you have a combination

that is suitable for a recession no matter what even if we are not a recession we are heading for one simply because of those macro variables and the way they work with all prices yeah it's a scary situation how so in your perspective how dire is a situation in terms of what is going to to unfold throughout the rest of the year well luckily luckily all of this coming after the lockdown during covid so anything we are going to see is going to be uh in a sense less than what we've seen in 2020 uh and and people will be thankful because the memory is still fresh uh if we did not have covid it would have it would have looked really bad but because of the lockdown during covid a lot of people lost their jobs they got locked at home etc now at least okay

if i lose my job i still can travel i can visit my mother i can go around etc so uh yes it's bad but because of the lockdown during covid things are not going to look as bad and so how do you see the situation between russia and europe playing out with their gas obviously russia is asking for rubles for the delivery of gas. You have Western nations vehemently trying to make sure that those exchanges of energy don't happen. You have European politicians telling people to skip showers and to turn their lights off, to protest against Russia so that they don't need their gas. You have Russia being saber rattled right now where they're probably getting angry and they could get to a point where like even if you want the gas

we're not gonna deliver it to you like in my mind that whole situation between russia and europe specifically needs to be settled in a diplomatic fashion at some point this summer if we're going to avoid a global catastrophe because the natural gas affects fertilizer prices it affects obviously energy prices uh and that could have very strong ripple effects across the global economy several points here. The first point is the only reason why oil prices went above $100 is because of the invasion. Otherwise, we would not have hit $100, or that would have been probably in the 80s. So the Russian invasion caused the prices to go above $100. The second point is that the reason why we have this situation in the energy markets are the sanctions, not the invasion itself. So it's

reaction of the united states and europe to the invasion that is directly causing the shortages that we are talking about yet europe in particular was suffering from energy crisis before the invasion anyway because of their green policies that went sour the third point here is this And I really want people to focus on this point and go check them out, because everything I'm going to mention is available to everyone to read. Justin Trudeau, sorry, I have allergies, so I have to kind of wipe my eyes here. Justin Trudeau, the Prime Minister of Canada, has already decided that Canada would not or would ban crude oil imports from Russia. And the media that supports him basically showed him as a hero, a person who really cares about human rights, who cares about Ukrainians, etc. But Canada does not import any crude from Russia.

But the media still talks about Trudeau banning the crude imports from Russia. the prime minister of england has already said that the uk will ban oil imports from russia but if you look at the text by the end of 2022 shell oil company said that it will not buy oil from russia but if you look at the press release on their website it says they will not buy crude from russia in the spot market because most of their contracts basically most of what they buy is contracts not spot yet couple of days later because of the decline in the price of russian crude they were tempted to buy from the spot market and they did buy a tanker full of oil and they were caught by the media and then they

decided we are going to donate all the profit to the ukrainians uh if you look people think that oil companies left russia they did not uh they think that the oil services like wicker hughes like uh halliburton like slumber j have already left russia and therefore the oil industry in russia is going to suffer because western service companies left russia no look at the fine print the fine print said we are not going to do additional investment or a new investment in russia if you look at mcdonald's mcdonald decided to leave russia but mcdonald's is still open in russia why because it does not include the franchisees uh dannon stores uh dannon you know the the the ones you see when you buy yogurt you see dannon they own uh stores in russia they

said people thought they are closing their stores no they are not going to open a new stores in russia so everyone is playing with the words but in reality what is the impact on on putin president biden says when he when he banned russian imports no one knew that he is banning russian imports after two months they thought he banned russian imports at that day and in his speech he said we imposed restrictions on russian banks so they cannot use swift well that was not correct, because it's only on some local banks that have no impact. Now, I will answer your question directly. And the evidence that he did not ban SWIFT, because Europeans are using Gazprom Bank to pay for Russian gas. So they did not ban all the Russian banks.

But look at the game they played. Putin says that I want the Europeans to pay in ruble, and I want them to buy the ruble from the central bank. The European says, look, 97, 95 or 97% of the contracts have the currency listed in them. So it's either dollar or euro. And therefore, any violation of the contract, and we know this in law, any even one word, you are violating the whole contract.

So we cannot violate the contract and you cannot either. and putin has some good legal team they understood it because if they violate the contract while russian assets are confiscated in the west people can sue him and take the compensation from the assets from the frozen assets they know that at the same time they told him look and we cannot buy rubles either because the russian central bank is on the list of sanctioned entities So I'm not going to violate the contract, and I'm not going to violate the law. I cannot, because I go to jail or my company will be fine. Well, a couple of days later, what they did?

The Putin administration came back and said, look, we are going to honor the contract. So here is a bank that is not sanctioned, which is Gazprom Bank. You deposit the money in euro or dollar, just like what the contract says, in this bank. And then this bank is going to convert it to rubles. So we, once you give me the euros and the dollars, I am going to convert it for you to rubles. And since you cannot violate the sanctions in your country and you don't want to deal with the central bank, this bank will do it. And then I'm going to open accounts in rubles in your name.

So you don't have to touch anything. Just give me your name. and I will open one in your name and then I will receive the money in rubles and in front of the Russian people, I look really a hero because I already forced you to pay in rubles. That's really what's happening.

Well, it seems like it's working though, right? Because the rubles is pretty strong right now. Well, it's strong, but it's not in a free market because what they did is they played other games. First of all, we don't have enough rubles in the system to pay for it. So that's one reason for the increase. The other reason is they officially priced the ruble in gold until the end of June.

So this is, in a sense, a fixed exchange rate, not a free exchange rate. Because from now until June, it's related to gold. It's not pegged to gold because some people in the media kept saying it's not pegged to gold. Because if it's pegged to gold and gold prices go up, I can take the rubles, exactly what happened in the United States in the early 70s. If gold prices go up, I can take the rubles and tell Putin, cash in, give me the gold. So they were smart enough. They did not peg it to the gold. What they did is they priced it in gold.

So no one has claims on the ruble in gold. So this is an artificial rate. This is not a market rate. And then they turned around and they said, OK, we are going to force Poland and Bulgaria to pay a rubles. And the Western press made a big deal out of it. But they ignored one fact that the only reason why, let's go back to the legal issues I discussed earlier with the contracts. People did not say that the contracts were ending before the end of the month. So he was forcing them simply because there were no contracts.

and if they want to sign new contracts they can do it based on negotiations so he is not violating any of the contracts and the um the the press statement that was made by uh the uh german counselor was absolutely incorrect because he said this is a violation of the contract there was no contract because the contracts ended and and putin knew that the amount of gas sold to those countries is very small and therefore if they stop completely they are not going to affect russia while can he can send a clear message to the big customers like germany and early that dare you mess with me because i can cut you off the same way i cut them off and i think if they want to call the bluff they can because he cannot

so is this just a temporary transitionary period where for outside of poland and bulgaria where he's set up the gas prom bank accounts he's taking in euros and dollars converting him within gas prom to rubles and then showing uh the russians i guess they're paying not really uh there are two points here i think for the audience they need to know uh the first one is uh the only reason why Poland was able to take it because their storage was 80% full. Some analysts, they took that and they said, look, NATO is united against Putin and this is a good sign and thanks for the Polish government and this, this. I don't think this. I think what happened is they are comfortable right now. But once we have gas shortages, every country on its own.

So Poland, and I will give you an example, because one of the objectives of Putin seemed like was we have pipelines going through Poland to Europe. And Putin thought if he cut off Poland, then he can force the Polish government to do what Ukraine did about, what, I don't know how many years, 12 years ago. uh they ukraine did not pay uh the cost of gas that it consumed the russian gas so what putin did he cut off the russian exports to ukraine to force ukraine to pay for the gas and it was in billions what the ukrainians did at that time they tabbed into gas going to europe and they caused a crisis in Europe. Putin, learning from this lesson, he thought, if I cut off Poland,

the Polish are going to do just like the Ukrainians. They're going to tap into the pipelines going to Europe and I can fragment Europe, I can fragment NATO because he really wants them to split. But they did not. And that's why we've seen those analysts talking about the unity. But they missed the point. The point is they have enough gas.

If they don't have enough gas, If we go to the winter and there is not enough gas, you are going to see Poland breaking up with NATO. You are going to see them tapping into those pipelines and taking gas that's supposed to go to Germany or others. So that's one point. The other point is we are going to see some permanent changes in supplies. Because even before the Russian invasion of Ukraine, the U.S. forced Germany to ignore Nord Stream 2. Nord Stream 2 is a pipeline that was built through the sea directly between Russia and Germany to avoid Ukraine.

So it's supposed to replace the Ukrainian gas line. And then before it started operation, they stopped it completely, and a lot of people think it's dead by now. Well, what the U.S. Why the U.S. did that? The U.S. did that because everyone knows that the U.S. is becoming one of the world's major exporters of LNG. And the natural market for US LNG is Western Europe. So you want to guarantee, as a superpower,

you want to guarantee a market for your product for years to come and for decades to come. And this was an opportunity to stop Nord Stream to guarantee your market share in LNG as a replacement. And then the war happened, and this kind of engraved in stone the market share of LNG of American LNG in Europe and that's why they are asking Germany to build those uh regasification plans so they can buy from the U.S. and they don't depend on Russia

so we are going to see some major changes that become permanent and one of them is the dependence on U.S. LNG in this case which means that less Russian gas in uh in Europe we are going to see a push to lower oil imports from Russia, and that's going to be successful. So we are going to see reduction, but we are not going to see elimination. Some countries that depend, just kind of like tiny dependence on Russia, they can eliminate that dependence. That's going to be permanent. But we are not going to see a permanent cutoff of Russian oil and gas in Europe. And one of the problems that people are not talking about is that what Europe did is kind of very strange and shows you how, and excuse my language here, how dumb the European leadership

have become. With the push toward climate change policies, they are changing their dependence from fossil fuel to mining lithium cobalt graphite nickel and other things that are needed for the green economy so just we are moving from one set of natural resources from dependence on one set of natural resources to another set of of of natural resources but this new set is concentrated while oil and gas and coal exist in so many countries and some of them are local in europe like Norway and the UK, others, while Europe does not have any of the others

that are needed for the green economy. They have to depend on fewer countries around the world, while most of the processing of those metals is in China. So it's just kind of very strange that you are moving from dependence on natural resources to another natural resource that has more volatility and that is more dangerous and more expensive. The other one is, when it comes to natural gas, they are moving dependence from one superpower, which is Russia, to another superpower, which is the United States.

So they are not solving their own problems. And there is no kind of domestic solution because they are not even focusing on domestic solutions in this case. They think green energy, which means that solar and wind, is going to solve their problem. Well, that's another joke because solar panels are coming from China, the minerals are coming from other nations, and they are going to end up what the Saudis intended. The Saudis are saying, look, you don't want my oil? That's fine. You don't want my petrochemicals? That's fine. Look, you want your electric vehicles? Go for it. I'm going to make sure that the body of that electric vehicles and the tires are made from my oil and gas. I want to make sure that I will export that oil and gas to you

embedded in something else. And Europe is asleep at the wheel. One of the jokes we see in Europe today is what happened in Norway, which is kind of really ironic. They spent all their oil money to buy electric vehicles. What is sad about it is all those electric vehicles are imported. Norway does not make electric vehicles. If they were making them, I understand that.

But they have to import every single electric vehicle. So they imported those vehicles. And we are talking, as you know, about vehicles that cost $70,000, $80,000, $90,000, sometimes $120,000. Subsidies were huge. The benefits were huge. All those extra benefits that come with the use of electric vehicles, such as not paying for parking or using the bus lanes, etc. then after people spend all this money and after the government spent all those oil money

in the last four or five years, all of a sudden the officials are telling people to park their electric vehicles and ride the bus. It's a clown world out there. I mean, we talked about this the first time you're on, and I've been talking about this ad nauseum on this show for the last year and a half, the idiocy of energy policy across the world is astounding and the the hypocrisy of it all like

you just mentioned uh you you're going to phase out fossil fuels but then you're going to go dig up all these rare earth metals and other parts of the world and import that making it inherently more expensive here is one for you because this is this is very interesting now those countries are shifting to dependence on uslng as a replacement for russian gas That's one question I had. Do we have enough LNG to replace that supply? No, we don't have enough LNG, but the Europe dependence on gas right now

is more on the US than Russia. So we reached that point. But the problem is all US LNG going to Europe is coming from the Gulf of Mexico. And what is Gulf of Mexico known for? It's known for those hurricanes. some of them are a disastrous hurricanes remember katrina remember rita remember ivan uh all those hurricanes so what europe what will europe do when we end up with

those hurricanes in the gulf of mexico from where they are going to replace u.s gas not only that natural gas prices right now in the united states are very high and mark my words if they continue like this we are going to see before the elections we are going to see senators and congressmen calling on the u.s government to ban or reduce lng exports to europe what would europe do they're between a rock and a hard place they're absolutely they're gonna have to go back to russia and say all right we don't care about these sanctions absolutely that i mean once they have uh uh shortages you are going to see the breakup in in uh eu policies you are going to see the breakup in nato and you are going to see all kind of of fights among them because of those

energy shortages after all those politicians want to stay uh in their seats after all those politicians the sincere ones wants to take care of their populations and country they don't want to to uh uh take care of someone else's country so in the long run do you think this is actually a good thing that we're having this come it's not russia and ukraine conflict specifically but this this energy conversation globally or do you think this is going to wake people up and countries up and politicians up to the fact that you need to approach energy security and policy in a much different way moving forward the problem is when you have climate change as a religion it's very hard to see conversion

and to give you some examples uh when it comes to sound energy policy if you you need to have energy security and to have energy security you need to have diversity of energy sources and you have to to have diversity of supplies and europe did the two mistakes they focused the energy and they focus their imports. The other issue is if you worry about climate change and you want to have good policies, good environmental policies to protect the environment, you need to balance three things. You need to balance energy security with economic security with environmental security. If you sacrifice energy security at the altar of climate change, you are gone. You cannot even protect the environment anymore. We have enough evidence from Europe and around the world

that for example italy is going back to coal germany is going back to coal why because they sacrificed energy security and all of a sudden now they want to go back and and kind of fix that energy security thing at the expense of environmental security in places in india where they increase taxes on fuel substantially despite yes some of the fuel is subsidized but fuel prices are still way higher than the past. We've seen mothers basically going to the old coal mines and taking coal and burning it to cook or going and cutting trees from the forest to cook.

So all of a sudden, the objective was, okay, I want to raise prices, so I want to get a cleaner environment. And all of a sudden, I'm getting the opposite. Well, I think as this crisis intensifies, is this is going to create a large pendulum swing against the climate religion that has taken over the world and forced us into this situation?

I don't know, because we've seen fanatics around the world. We've seen the killings. We've seen all kinds of things, et cetera. So it remains to be seen how many people are going to convert, because if you really look at the cults around the world, how many cults basically just decided to wake up in the morning and change religion? Very few.

Very few, that's right. but there is that silent majority right i think about u.s centric there's probably a silent majority that when and the hens come home to roost from like all right like i was posturing this way like i like the environment and the climate change narrative might be real because it seemed like the the correct thing to do politically it seems like that's where the trend was going but i think they're once once you have rolling so do you think this is going to lead like rolling blackouts obviously gas prices are going to to increase significantly um the cost to heat and cool your home is going to increase uh like what are the repercussions of this failed

energy policy and the supply disruptions that are coming in your mind as long as the silent majority is not standing up to the media we are not going to see a change the media basically is going crazy and i will give you i already collected so many examples when i talk about so many examples like in hundreds just to give you a single example on this there was a headline news the other day that africa is going electric which means they are talking about electric vehicles africa the whole continent of africa is going electric and then you read the news and the news is about Zimbabwe using one electric vehicle

and one charger. So they took one little PR stunt in Zimbabwe and thrust it on the whole continent. There was a headline news that this city in the United States, this city is going electric because it's buying electric buses,

six electric buses. And you go to the details and they are talking about this city buying six electric buses. And wow, look at the oil demand. The oil demand is going to collapse. is going to decline and then you go to the city website and you read the news the city is buying 300 buses six of them are electric okay a major media outlet that does research and

consulting published a report last year saying that there is a city in the united states that's converting all its buses to electric that was two years ago by the way not not last year before just before covet uh they are converting all their buses to electric it's a major city and in their estimates that will reduce all demand by 60 000 barrels a day i contacted the guy in charge and i told them you guys wrote this and he said yes and he started you know knowing who i am so he kind of like trying to look fancy in front of me and we did this and we did this so i let him spoke and then let him speak and then i said okay hold on just a second there is a problem here that city does not have a single bus that run on diesel they all run on cng that compress natural

gas and he said really i said yes so therefore this reduces the demand for gas does not reduce the demand for oil so he promised that before their annual conference they are going to make that change in the report they did not that shows you they did it on purpose and they insisted on and publishing that information on purpose. So the silent majority is not going to do anything as long as we have a media like that. I completely agree. It's disgusting.

Like how does it, what is in it for the media to be lying to that degree? I don't know, but let me tell you, there are major media outlets contacted the people who write columns for them and told them that was two, three years ago. They told them, sorry, we cannot publish any more oil articles.

We cannot publish. Yes. So they're being banned from even covering the subject. I have journalists who contact me on almost on weekly basis saying, we like your tweets, we like what you said here, etc. Unfortunately, we cannot write about it because my editor banned us from writing on this and this. This is why we need alternative media. This is why I'm happy that you're on the show, hopefully. Absolutely.

I mean, it's just very, very frustrating. I mean, it goes to the limit. Let me give you another example. I wrote an article, which is a fantastic article, not because I wrote it, because everyone said it was a fantastic article. And the person in charge basically liked it. They submitted it. And then the editor of that newspaper said,

we cannot publish this article without an opposing point of view. What was the article about? well i'm i'm not going to mention it now because people would know i don't want to but the idea here is they why because it was something they did not like there's a bunch of fear-mongering out there about oil and gas money putting propaganda out there but it seems like it may be coming from the other side where you can't even write about the subject and it's a very like that's what really aggravates me is this is such an important part of human life like energy is what makes our world possible today and let me tell you a story

because this story tells a lot about the media a few years ago saudi arabia had the longest serving minister who is ali and naimi very decent man and it's very hard to anger him and there was this big OPEC meeting in Vienna and he was leaving the hotel with his entourage, going to a dinner event. And as usual, hundreds of

journalists basically were surrounding him while he's walking and everyone, if you can picture this from like a fourth story in a building or through a drone or something, you can see it like moving.

The whole people are moving with him. And this lady from SMBC stood in front of him, and she was walking backwards, and she started yelling at him and accusing him of destroying the environment, being against climate change, and she went on a rant. And she just, I mean, she just wanted to make a statement. And the man is, I mean, he's an old man, but he is really kind of prestigious and royal in a sense. and he was walking calmly and suddenly his face got red and he got really angry he stopped and he looked at her and he said lady you want to talk about climate change and remember we are talking about saudi arabia here you want to talk about climate change it passed through my country tens of thousands of years ago so don't teach me about climate change it's it is a religion

and it needs to be continued to be called out because it's i mean we talked about it last week i had dr safedina moose on who wrote the bitcoin standard and that's what really frustrates me about the climate hysterics like that msnbc reporter probably flew over there on a jet was using a cell phone to send tweets out about the subject that were being stored in a server farm being powered by uh some hydrocarbon um and it seems like humanity in regards to to climate and energy policy we're living in an idiocracy and at what like maybe that's what it's going to take the rolling blackouts and ten dollar a gallon gas here in the united states to really Let me clarify this point to the audience. You and I are not, in a sense, denying climate change. We are not against climate change policies. We are talking about the hypocrisy of it. So it is really the hypocrisy that's killing us. And that's what we are criticizing here. We don't want to discuss the issues related to climate change because this is really past that point.

We are talking here about the hypocrisy of the profit, of the profits of climate change and the lies and other actions they are taking and the way they are limiting our freedoms in the name of climate change. So I don't want the audience to think we are denying, and all of us enjoy the clean water, we enjoy clean air, we enjoy all of that stuff. But the issue is, this is really the hypocrisy of those guys and the hypocrisy of those people that is killing us. And that's what you are talking about on the plane and the tweets and all this stuff. And it seems, it seems like the, so particularly for the solar industry, it became a big meme within the last year that a lot of the polysilicon that the solar industry is using is being made in China and it's being made at the hands of Uyghur slaves. And did I read correctly last week that the Biden administration sent a letter out to the solar industry to do an audit on their supply chains to find out if that polysilicon is actually coming from Shenzhen? And if so, they're going to need to find polysilicon somewhere else, which would completely annihilate the financial projections of these solar projects. Yes, there was news about, basically, the solar panel producers in the United States loved that because it's really a form of subsidy to them once you have restrictions. So it helped the U.S. solar industry.

But at the same time, it slows down the use of solar and therefore the Biden administration cannot achieve its goals simply because you don't have enough supplies coming to the United States. And the irony here is while they appear they are doing it for human rights issues, it's really not about human rights. Because if they care about human rights, they would have care about people in Syria or other places where people are being killed. Probably you've seen that video last week that's been released about how members of the Syrian army basically been killing people. If you haven't seen it, I'll send it to you because it's one of the most horrific videos you would ever see in your life where they were, let's say, they just kidnapped people from the street and they put them like on a second floor building with no walls. And they told them, look, there is a sniper coming in. I'm going to help you pass the street, so run. And they run from the second floor or third floor and there is nothing.

and they just fall into a big ditch that is full of tires. And then while they are falling, basically, others will spray them with bullets. And that was a game they were playing. And as if this was not enough, basically, they just grabbed some people and they just started using knives, I mean, piercing their bodies with knives and all that stuff. and all of this was on their own phones because they thought that was very cool and the biden administration said nothing as if so it's very hard to and to kind of take the issue

okay we are doing this to solar panels because of human rights it just that's that's the point yeah i mean when it comes to hypocrisy the united states is the biggest hypocrite in the world in regards to human rights you can talk about iraq afghanistan what's going on in syria uh, it's, uh, yeah, it feels like, so again, going back to energy markets and the shift in terms of how contracts are being made. And I think we're having like a political shift as well as people are beginning to wake up and realize the politicians have put us in a very precarious situation. Do you think we are at the beginnings of a transition to a, a new basically market structure globally like you mentioned at the end of the year you're you're going to have a bulk

i'm going to say balkanization but you're going to have a breakup amongst the eu and nato nations due to the desperate need for energy uh this is this beginning of maybe it is a balkanization a massive balkanization of the world and a restructuring of just like the global economic yes we are already seeing a complete restructure of the global trade for various reasons so remember that it's not only we have a major inflation worldwide not only because of the increase in fuel prices but also because of the increase in food prices and the increase of the price of metals and everything else the green energy basically the price of the cost of green energy is going up. The cost of electric vehicles has gone up by more than 30%. So we have those

major changes. And since we have food shortages and fuel shortages, only the rich can afford that. And therefore, we are going to redirect resources toward the rich, and the poor are not going to get it. In addition, because of the sanctions, we are going to see Russian products going somewhere else, while someone else's products going back to Europe or the United States. So we are seeing a major change a major shift in international trade and that shift is costly why because markets by nature are efficient so if you have if you are neighbor to canada it's not it makes perfect sense to trade oil and gas with canada because they are your neighbor you reduce costs and markets become efficient in this case but if you decide okay i'm going to fight with the

the canadians now i'm going to import uh from north sea for example from brazil all of a sudden your cost goes up and you are not efficient so these sanctions are causing all kind of inefficiencies in everything yeah that's going to be costly to everyone and anything that has shortages only the rich will get it the poor is not going to get it the fear now is we are to we are going to see turmoil in those poorer countries we are going to see military coups and as you know most of those poorer countries they are producers of some sort of natural resources so if you look at the coastal areas all the way from morocco all the way down to to south africa each one of those countries produce some sort of natural resource

that the west depend on so if we end up with turmoil in those countries all of us are going to suffer because of that because their exports of whatever they are exporting is going to decline it's it's a very scary like i mean i just keep having flashbacks was it 2010 or 2012 with the arab spring and what was it like a 20 rise and wheat cost in egypt led to that revolution and now this is like take the arab spring and put that on a global scale and imagine the type of unrest that could unfold and it's a very...

People are not paying attention to another fact. Because of this, historically, when George H. Bush decided to go to war to liberate Kuwait, we ended up with a problem

because he imposed sanctions on Iraq and the U.S. was the largest exporter of wheat to Iraq, and all of a sudden, U.S. farmers got stuck, and they couldn't sell their products. So U.S. farmers in places like New Mexico, for example, were demonstrating in the streets against Bush because they got stuck, and the same thing is going to happen with everything we just mentioned add to it that french farmers and dutch farmers american farmers are not going to be able to sell their products too and that's going to cause so many problems around the world

well the other question is are they even going to be able to get the yield on their products that they have in years past because of the fertilizer situation absolutely absolutely and And I remember in 2000, I think 2005, probably 2006, when natural gas prices were going up in the United States, as you know, they went up to $14. We are at $9, I think, right now. They went up to $14. And many farmers couldn't plant that year. I was in Ohio, so many Ohioan farmers, they couldn't plant their land that year, and many

went bankrupt. so the banks basically took over that's what happened and that means the following years we are going to have a shortage of supplies as a result of this yeah then you factor in the diesel shortages as well even if they do get the supplies and a smaller yield can they deliver it to market what are the costs on that going to be this is absolutely like how would you describe the gravity of the situation right now i think right now it is severe and it's going to get worse and this is really i mean look at the stock market what happened today uh look at what happened to oil prices today uh a lot of people are are losing basically everything they gained the recent year

they just lost right now so we are losing wealth and uh if this deteriorates people are going to to lose their jobs and i think politicians are more worried about re-elections and how they are going to frame their messages in light of this crisis rather than to focus on solving the crisis itself and what would you what would your advice be if you had a magic wand i mean this is kind of what it's too late now to to do i mean the damage already happened and why because the the season for planting in ukraine already passed so the the season is gone and ukraine is a major exporter uh of wheat and other products to several poorer countries you mentioned egypt earlier so the damage already been done so there is really now we can probably do some mitigation but that's

it uh but more than that the damage was already done i think from the beginning it was clear that they should have done i'm i don't want to delve into politics here but they should have done the idea that biden will go to ukraine was known long ago and for the intelligence community and for the biden administration it was known long long ago so they would have done something and i can tell you how much time we have left by the way because i want to tell a story if there is time plenty of time okay uh it was in august last year when jack sullivan the national security advisor of biden sent a letter to opec members especially in the gulf asking them to increase production and the main frame of it was look you know we are recovering from covid and uh this recovery

needs low prices and therefore we need that to hear u.s media start talking about we need lower gasoline prices, and therefore, the whole letter and the asking of those countries to lower, to increase production, lower prices, is to help U.S. economy. Immediately that day, for those who follow me, they read my tweets, said, hold on just a second, there is something very fishy here, because you have a national security advisor who negotiated the Iran deal in 2014 talking about local gasoline prices? That does not make sense.

Then a couple of weeks later, Jack Sullivan goes to Saudi Arabia and the UAE, and he came back after he was completely brushed off and ignored. The whole story does not make sense. And for those, again, for those who follow me, they can go back to those tweets. We thought at that time that the administration was having serious problems in the negotiation with Iran,

and therefore they are preparing for the failure of the negotiations, and they wanted an increase in production, has nothing to do with local gasoline prices. Well, we were wrong too, because we found out it was in preparation for Russia's invasion of Ukraine. Because at that time, Russia was moving its troops. the invasion should have happened in late december then it got delayed for various reasons including to honor the the chinese request not to do it during the olympics uh in china

so they delayed it but the request to increase production has nothing to do with u.s uh gasoline prices or economic growth because they know between the time they decide to increase production until that oil is in the market, it takes two or three months, which is the time of the invasion. So the idea here is those in high offices who knew about the

invasion, they should have done something early enough to help us avoid what we are in today, but they did not. What could they have done, in your opinion? Well, there were several things, I mean, just like either in form of negotiations or

prepare the sanctions in a more rational way because most of the impact is coming from the sanctions not coming from the invasion itself there could be some bargaining about because he already got Crimea anyway so what what the idea of going back and opening old files because the president of Ukraine saying oh we are going to fight until we get Crimea back well we know he's not going to get crimea back so why we are using our taxpayer money uh for an objective that's not going to happen yeah but the bottom line here is those politicians knew early that this invasion is going to happen and they at least at least they did not choose the right policies to mitigate the impact yeah and then when the when the invasion broke out that's one thing that really frustrated

me is the way biden framed the options on the table he said yeah you get sanctions or you get world war three and he left out another important option which was diplomacy hey let's meet at the table and and have a discussion here is one thing that's kind of really strange uh you have zielinski who is the president and you have the gas pipeline that goes through Ukraine to supply Europe with natural gas.

Russia during the war provided more gas to Europe through that pipeline. Why Zelensky did not stop it while he was asking others to reduce consumption? Siphoning off some for himself? We don't know.

but the question is why he is asking them don't buy don't buy russian gas don't buy uh russian oil but the russian gas is going through his land that the land he controls why he'd not stop it he could have bombed it and no one is going to blame him by the way if he's done that yeah what is it's all very perplexing because what is the end goal here How does this end? Are we going to go to World War III? I mean, that's typically in times of... I mean, that needs some specialists in this area. I mean, for me, as you know, the idea here is as simple as this. We are ending up with a situation where energy supply is not enough for energy demand. And therefore, regardless of all the other crises that we are going to have, we are going to have a major energy crisis.

we are going to have unprecedented energy crisis all of us are going to pay the price for it and i don't know what we are going to do uh i mean we ended up when look there are states right now they are codifying codifying this into law that you cannot build a house with natural gas connection okay so all electric and if the power goes out how we are going to how we are are going to live yeah okay and and we are in texas if we hit 110 112 degrees this summer we are not going to have enough power in texas okay people are going to die because of that california is the same thing in europe it's the same thing so those policies if they give like when we had the freeze a couple of years ago in texas in february those houses that has natural

gas natural gas saved them literally saved them they can have a literally a hot meal they can have hot water they can have literally a fireplace on gas in this case those who were electric they got stuck yeah they were sleeping in their cars so so we are hitting well sleeping in the car by the way if you go back to the web we have here in texas a mother and her children died because of that if you go back and see that what she did the mistake because it's too cold so she showed she can warm up the car and put her children in it and she did not open the garage door and three of them went to sleep in the car while it was running because they want the heat imagine what happened you don't think texas has gotten his act together since that

incident in terms of grid build out and delivery? Well, they did some changes. I mean, we are just praying right now we are not going to hit that 110, 112, because this is really, right now, a disaster. And the other issue

related to this is other states depend on Texas. Texas does not depend on others, but other states depend on Texas. And that's another problem. The other issue that's kind of really kind of frustrating that if you look

at Europe right now, they linked Ukraine to the grid in Europe, in a sense as a sign, okay, you are no longer dependent on Russia. And the Ukrainians say, we are part of the European grid. Well, guess what? When you have shortages of electricity,

you are going to get nothing. What that means is when you need it the most, it's not there. We need adults in the room to stand up. Can we make you energies are of the United States? Well, I mean, this is really, I mean, now when we teach young kids, this is where things, where Bush comes to shop.

Those kids are so dependent on technology. And I can see it in my children. If we have the internet off for 10 minutes, they go crazy. If the power is off for 30 minutes, they go crazy. I'm talking crazy, like literally crazy. You feel like there is something wrong with them. Okay? So imagine we have a whole generation like that.

So if the power goes out for a few days, what's going to happen? It's going to be chaos. Schools are not in session. Those kids are staying home. And there is no power. It's not going to be good. I mean, it's again, like I said, a very precarious situation. And if you go down the pessimist path of where this can all lead with energy shortage, food prices rising, like we're talking again, like a global spring and people rioting in the streets. It's like if we thought the riots of 2020 were bad,

this commodities-driven shortage and crisis is going to be significantly worse. People do not realize that when humanity, over time, went through process and they adopted certain policies or certain things, they adopted those things because they are the best and the least risky. The least risky.

This is very important. so there is a reason why we did not move to other things there is a reason why if you look at friends for example at the end of uh last month uh a bus an electric bus basically was parking in the street and all of a sudden caught fire and it was massive fire and caused fire around the house and all this stuff well uh and we've seen those fires all over the world well there was a reason we we had this 100 years ago by the way electric vehicles are very old older than gasoline vehicles but there was a reason why we moved out of them to gasoline engines etc because there were problems it wasn't a conspiracy it wasn't anything it was just a humanity learned its lessons why we

have to go through those lessons over and over and over the mistake by the way europe as you know had energy crisis before the russian invasion of ukraine and one of the main reasons because they violated the the basics of energy policies that i mentioned earlier but one of them they violated and this was uh where they they paid the heavy price them and india that all of a sudden a smart mba guy says oh you know what we can create some through financial engineering we can create some new energy contracts where you can uh it will be more efficient and it's better for you So shift from long-term contracts, because they are not efficient, shift to a spot market.

And the spot market, because we have plenty of supplies at that time, because, as you know, with COVID, the demand declined. And they said, look, you can save a lot of money. So if you buy LNG through a contract, you pay $11. If you get it from the market, it's $3.50. So why renew your contract? So everyone shied away from the contract, went to the spot market, and guess what? The spot market went through the roof.

We have the highest prices on record, and everyone was screaming and yelling. Well, there is a reason why we have long-term contracts. Humanity learned a long time ago that if you want security, you go through long-term contracts. This new financial engineering, basically, is just short-lived. We've seen it so many times before. And all of a sudden now, those countries going back to Qatar and other producing nations say, can we sign long-term contracts? Well, it's too late now, but they can now.

And that's, in fact, the Russian gas right now and Russian oil is still flowing to Europe at normal prices because they still have long-term contracts. all the reported record prices or the decline in Russian oil is the spot not the contract yeah we are definitely relearning a lot of hard

lessons right now do you have an optimistic path forward things seem pretty crappy right now but is there I mean the optimism stems from the fact that we are like you said

we are learning we have a new generation that is heavily dependent on technology and electricity and it's the most privileged generation ever existed on earth and the losses to them because of what's going to happen are so huge and they are going to realize that and once they realize that the losses are huge they are going to change the future so the idea here is they are going to suffer and they are going to have those huge losses

but those huge losses are going to lead to the optimistic view and if they don't then God forbid we are in deep trouble yes well if you're listening out there part of the most privileged generation to ever live

on this planet one of which I am those people we got to change we got to get voices like Anas's out there on the front lines, getting this information to people. I mean, Anas, thank you for joining us again. You're welcome. I just want to add one more point.

This is kind of very interesting right now. Historically, if you look at the refugees that have been coming to Europe, they're coming on a boat or something. Probably they have some paperwork and they don't with clothes that they've been wearing for a month and mostly torn up. I mean, they look like really a true refugee.

the refugee of today is a girl or a boy who is 16 years old what they have on worth let's say 300, 400 dollars yeah the the clout refugee

wearing designer well that shows like how bad it is like if you have refugees from countries where they're able to afford designer clothes

something's gone terribly wrong absolutely absolutely but the idea here is that the the this change will make things costly and and because it's costly we might see the other change to the positive yes let's hope we learn our lesson as quick as possible because i've got my second child arriving any week now and i want to make sure that they're able to to grow up in a world where they don't suffer um and me personally i'd like to see a lot of change particularly in terms of how energy policy is being approached and implemented particularly here in the u.s but across the world and so i'm very grateful that individuals like yourself exist and are willing to come on this show and educate us about

exactly what's going down on the ground because i think you're a very important voice in the space and hopefully anybody listening to this please share this with family and friends who are a bit confused as to why prices are going haywire. And given what you said, you just said, it is very important for everyone who follows me to understand this. I also tweet in Arabic and therefore there is translate button at the bottom of each tweet and you can switch any article to any other language. So that learning is not only from, if you see it only English, there is wealth of information in other languages so please use that translate button or switch the browser to another language or to english so you can read what the others are reading too i highly recommend

it i'm i'm translating your your arabic tweets every time i see them it's very accurate the translations are getting are getting better over time too um and nas thank you for doing this i can't wait to do it again um please let me know when you come to austin if you do i will i will thank you alright enjoy the rest of your afternoon thank you bye bye

peace and love freaks take care